Central Consumer Protection Authority (CCPA): Powers, Functions & Your Rights Explained

1.1 The Crucial Role of the CCPA in Today's Marketplace

The Central Consumer Protection Authority (CCPA), established under the Consumer Protection Act of 2019, represents a cornerstone in safeguarding consumer interests across India.

From a consumer perspective, the CCPA is a vital shield, empowered to protect and enforce their rights collectively, particularly against pervasive issues like unfair trade practices and false or misleading advertisements (Section 18(1) of the Consumer Protection Act, 2019). It acts proactively to prevent violations that harm consumers as a class.

For companies and businesses, the CCPA emphasizes the significance of ethical conduct and transparency. While it holds businesses accountable for their practices and advertising claims, it also promotes a fairer marketplace by ensuring that misleading promotions and unfair methods are addressed (Section 18(1)(b, c, d)). This helps establish long-term consumer trust and benefits businesses committed to compliance and fair dealing.

1.2 Explore Our In-Depth CCPA Resources

Understanding the specific functions and powers of the Central Consumer Protection Authority is essential for both consumers and businesses navigating the current regulatory environment. To assist readers, we have developed comprehensive resources right here on our website.

We invite you to explore our informative videos below, which simplify the key aspects of the CCPA’s operations and impact.

Additionally, explore our detailed articles examining the various facets of the CCPA’s mandate and enforcement actions based on the Consumer Protection Act, 2019.

In this article, we will cover the following mandates of the CCPA.

1.3 The CCPA's Core Mandate

According to the Consumer Protection Act, 2019, the primary mandate of the Central Consumer Protection Authority (CCPA) is well-defined. Its core responsibilities include (Section 18(1)):

Protecting, promoting, and enforcing the rights of consumers as a distinct class.
Preventing violations of consumer rights outlined in the Act.
Actively working to prevent unfair trade practices and ensuring businesses refrain from engaging in them.
Ensuring that no false or misleading advertisements for goods or services are created or published.

1.3.1 Key Functions and Powers of the CCPA

To fulfill its mandate, the CCPA is endowed with a broad range of powers and functions (Section 18(2)):

Inquiry and Investigation: Conduct inquiries or investigations into violations of consumer rights or unfair trade practices. This can be done on its own initiative (suo motu), upon receiving a complaint, or based on directions from the Central Government.
Legal Action: File complaints with the District, State, or National Consumer Disputes Redressal Commissions and intervene in ongoing proceedings related to violations of consumer rights or unfair trade practices.
Review and Recommendation: Examine factors hindering consumer rights, evaluate safeguards under various laws, and suggest remedial measures. It can also recommend adopting international best practices.
Research and Awareness: Undertake and promote research in consumer rights and spread awareness among the public.
Collaboration: Encourage cooperation between NGOs, consumer protection agencies, and other relevant institutions.
Standards: Mandate the use of unique identifiers for goods to prevent unfair trade practices.
Safety Alerts: Issue safety notices to warn consumers about dangerous, hazardous, or unsafe goods and services.
Advisory Role: Advise Central and State Government Ministries and Departments on consumer welfare measures.
Guidelines: Issue necessary guidelines aimed at preventing unfair trade practices and protecting consumer interests.

1.4 Investigation Process

The CCPA has a structured process for handling complaints and initiating investigations:

Complaints: Complaints regarding violations affecting consumers as a class (unfair trade practices, misleading ads) can be submitted in writing or electronically to the CCPA, its regional office Commissioner, or the District Collector (Section 17).
District Collector’s Role: The District Collector can investigate class-action type complaints within their jurisdiction upon receiving a complaint or a reference from the CCPA, and submit a report afterwards (Section 16).
Preliminary Inquiry: The CCPA can conduct a preliminary inquiry (based on information, complaint, government direction, or suo motu) to determine if a prima facie case exists regarding violations, unfair trade practices, or misleading ads detrimental to public/consumer interest (Section 19(1)).
Investigation Wing: If a prima facie case is established, the CCPA directs its dedicated Investigation Wing, headed by a Director-General, or the District Collector to conduct a formal investigation (Section 15, Section 19(1)). The Investigation Wing submits its findings back to the CCPA (Section 15(5)).
Referral: If the CCPA believes a matter falls under another regulator’s purview after the preliminary inquiry, it can refer the matter to that specific regulator (Section 19(2)).
Information Gathering: During an investigation, the CCPA, Director-General, or District Collector can summon individuals and require the production of documents or records (Section 19(3)).

1.5 Enforcement Actions: Recalls and Orders

Based on investigation findings showing sufficient evidence of consumer rights violations or unfair trade practices, the CCPA has significant enforcement powers, provided it gives the concerned party an opportunity to be heard (Section 20):

Order the recall of goods or withdrawal of services identified as dangerous, hazardous, or unsafe.
Order the reimbursement of the purchase price to consumers for recalled goods or withdrawn services.
Order the discontinuation of practices deemed unfair and prejudicial to consumer interests.

1.6 Tackling False or Misleading Advertisements

The CCPA has specific powers to address false or misleading advertisements that harm consumer interests or violate their rights (Section 21):

Order Modification/Discontinuation: Direct the concerned trader, manufacturer, endorser, advertiser, or publisher to discontinue or modify the misleading advertisement within a specified time.
Impose Penalties:
- On manufacturers or endorsers: Up to ₹10 lakh for the first contravention, and up to ₹50 lakh for subsequent ones.
- On publishers or parties to the publication: Up to ₹10 lakh.
Prohibit Endorsers: Ban an endorser associated with a false or misleading ad from making any endorsement for up to one year (up to three years for subsequent contraventions).
Defenses: An endorser may avoid penalties by proving they exercised due diligence to verify the claims. A publisher may avoid penalties if they published the ad in the ordinary course of business, unless they knew about a prior CCPA order regarding that ad.
Penalty Considerations: When determining penalties, the CCPA considers factors like the affected population and area, offense frequency and duration, vulnerability of affected consumers, and gross revenue generated from the offense.
Hearing: An opportunity of being heard must be given before passing orders under this section.

1.7 Search and Seizure Powers

During an investigation (following a preliminary inquiry), if there’s reason to believe a violation has occurred, the Director-General, an authorized officer, or the District Collector can exercise search and seizure powers (Section 22):

Enter premises at reasonable times.
Search for and seize documents, records, articles, or other evidence.
Make notes or inventories.
Require production of records or documents.
These powers are exercised following the procedures outlined in the Code of Criminal Procedure, 1973. Seized items (except perishables) are generally returned within 20 days after certified copies are taken.

1.8 Penalties for Non-Compliance

Failure to comply with directions issued by the CCPA under Sections 20 (recalls, etc.) and 21 (advertisements) is punishable by imprisonment for up to six months, a fine up to ₹20 lakh, or both (Section 88).

1.9 Rule-Making Power

The CCPA, with prior approval from the Central Government, can create regulations consistent with the Act to implement its provisions, covering procedures for engaging experts, transaction of business, and investigation reporting formats (Section 104).

1.10 Conclusion

The Central Consumer Protection Authority (CCPA) is a powerful regulatory body established by the Consumer Protection Act, 2019. Armed with extensive investigative and enforcement powers—including product recalls, directives against misleading advertisements, significant penalties, and the ability to file complaints before consumer commissions—the CCPA plays a critical role in protecting consumers as a class and promoting fair practices in the Indian marketplace. Stay updated on the CCPA’s work and its implications by utilising the expert resources available on our website.